In the second volume of the Economic Survey for 2016-17, which was released on Friday, Chief Economic Advisor Arvind Subramanian argued that the Indian economy faced significant short-term concerns, saying it was subject to strong deflationary pressures.

The growth outlook was more subdued than when the first volume was presented just before the Union Budget for 2017-18 in February; the Survey said all indicators “pointed to a deceleration in real activity since the first quarter of 2016-17, and a further deceleration in the third quarter”. The Survey retained its prediction of GDP growth in 2017-18 coming in at between 6.75 and 7.5 per cent but said that “outcomes closer to the upper end” were considerably less probable now than they had been earlier. The Survey also warned that current growth would be difficult to sustain given underlying factors.